### Borrowing Money

# How To Use RupeeCircle Loan EMI Calculator Efficiently?

**Personal Loan EMI Calculator**

Equated Monthly Instalment (or EMI) is the amount a loan borrower has to pay the lender on a regular basis throughout the agreed tenure of the loan availed. An EMI consists of two portions — a part of the loan principal and the interest for the month. The loan EMI calculator also known as the amortization schedule calculator is a tool that helps the borrower (as well as the investor) to calculate the EMI pay out. Generally the initial EMIs are considered as the interest payments of the loan and the EMIs paid towards the end of the tenure are the contributions towards the principal.

All the financial institutions generally use the same mathematical formula to calculate the loan EMI. Therefore, the amortization schedule and the calculated EMI for a particular loam amount taken at an interest rate and tenure generally remains the same across different banks and NBFCs.

**Loan Calculator for Borrowers**

Borrowers can make use of RupeeCircle’s online loan calculator tool to get the precise EMI for the loan taken. The loan calculator makes EMI calculation less tedious and helps the borrower take an informed decision about the loan to be taken and the EMI to be paid. Many borrowers go through the hassle of calculating the EMI for their loan by using the archaic calculator or by opening up MS Excel spreadsheet. Both the calculator and the spreadsheet will give the same result; however, using the online loan calculator is time saving and more accurate. Borrowers should ensure that the EMIs of their loans should not exceed 40% of their monthly income.

**Loan Calculator for Investors**

Although the savvy investors may have a lot of tools at their disposal to calculate the returns on their investments, they also make use of the loan calculator to gauge the principal and its interest they receive on a monthly basis. (The EMI is the monthly returns on their investment). A loan calculator comes in handy for an investor who has diversified investments in a P2P lending platform as it helps them figure out the returns from different borrowers.

**How to use loan EMI calculator efficiently?**

The EMI calculator provides an output based on the inputs entered by the user. The basic parameters of an EMI loan calculator are as follows: –

- Principal: This is the total loan amount approved by the lender. Borrowers can also enter the loan amount they need to get an idea about the EMI they might have to pay.
- Rate of interest: The rate applied on the principal
- Tenure: Most of the banks and NBFCs offer flexible loan tenure so that the borrower has the option to make a calculated choice.

There are two underlying mathematical formulas on which the EMI calculator works – first is the formula to calculate the monthly interest and the second and more complex calculation is the one to find out the monthly EMI.

**Monthly Interest Rate Calculator**

The two things every borrower considers while applying for a personal loan is the annual rate of interest and the monthly EMI. After deliberating different parameters different institutions charge different interest rate from different customers. To calculate the monthly rate of interest of a loan the annual interest rate must be divided by 12, i.e. if the annual rate of interest is 24%, then the monthly rate is 24/12=2%. The interest rate calculator calculates the borrowers per month interest rate.

**Personal Loan EMI Calculator**

The manual calculation of EMI is a tedious task for most people as it takes into account the loan amount, the rate of interest and the tenure in a complex mathematical formula. Also the tenure should be converted into months. The actual formula is as given below: –

EMI = [P*r*(1+r)^N]/[(1+r)^N-1]

Where

P –> Principal or loan amount

r –> rate of interest of the loan amount (monthly rate)

N –> Repayment tenure in months

It is always better to use a loan calculator to find out the monthly repayment as it is less tedious and gives an accurate figure.

**Loan EMI calculator Benefits**

Loan EMI calculator can be used before applying for a loan or anytime during the loan tenure as it helps analyse the repayment capacity of a borrower. Investors can use it to calculate their return on investment and to reshuffle their portfolio.

*Some benefits of using a loan EMI calculator: –*

Hassle free: Loan calculation can be done on a sheet of paper or an Excel spreadsheet, however, these are cumbersome. The online loan calculator removes the stress associated with manual calculations and makes the process hassle-free.

Time saving: After the 3 or 4 input fields are entered into an EMI calculator it displays the result within seconds thus saving precious time.

Financial planning: Finding out the interest rate and EMI helps a borrower gauge their repayment capacity and make informed decisions regarding their finance. The rate of interest and tenure can be adjusted according to your financial plans before applying for loans.

**How to use RupeeCircle Loan EMI Calculator Efficiently?**

RupeeCircle, the fastest growing P2P lending platform, is not just an avenue for borrowers to get quick personal loans, it is also a marketplace where investors can fund borrower needs in lieu of healthy return on investments. RupeeCircle Loan EMI Calculator is an efficient tool for borrowers who plan to apply for a personal loan. By entering the estimated loan amount, tentative interest rate and tenure the borrower can get an idea about the EMI and thereby plan monthly expenses. The lenders with diversified investment in RupeeCircle can use the EMI calculator to calculate the monthly returns from different borrowers.

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